Remarriage Does Not Extinguish Children’s Right to Compensation: Supreme Court Upholds Full Multiplier in Motor Accident Claim

“The minor children’s right to compensation for loss of dependency remains inviolable, irrespective of the widow’s remarriage” —  In a significant pronouncement Supreme Court of India affirmed the right of minor children to full compensation under Section 166 of the Motor Vehicles Act, 1988, despite the remarriage of their mother. The Bench of Justice Sudhanshu Dhulia and Justice K. Vinod Chandran dismissed two Special Leave Petitions filed by the insurance company, upholding the judgments of the Motor Accident Claims Tribunal and the High Court, which had awarded compensation of ₹76,63,508/- along with 9% interest from the date of claim filing till payment. The Court categorically rejected the insurer’s contention that the widow’s remarriage should lead to a reduced multiplier, establishing that the rights of minor children remain unaffected by such personal circumstances.

The tragic accident occurred on 18th November 1995, when the deceased, a highly qualified engineer employed by British Telecom in the United Kingdom, died in a collision involving his car and a truck. The deceased’s wife and two minor children, all residents of the United Kingdom, approached the Motor Accident Claims Tribunal in India seeking compensation of ₹1.3 crore, citing the negligent driving of the truck driver.

The Tribunal, relying on the First Information Report (FIR) and previous adjudications concerning the same accident, found the truck driver solely responsible. Adopting a 13-year multiplier and applying standard deductions, the Tribunal awarded a sum of ₹79,04,540/- to the claimants. The Insurance Company challenged this decision before the High Court, raising objections regarding liability, quantum of compensation, exchange rates, deductions, remarriage of the widow, and the rate of interest.

The High Court, after partial recalculation of the exchange rate, upheld the substantial award, affirming liability and the applied multiplier, prompting the insurance company to escalate the matter to the Supreme Court through Special Leave Petitions.

The apex court delved into multiple legal facets surrounding compensation under Section 166 of the Motor Vehicles Act, 1988.

The Court unequivocally upheld the findings of negligence on the part of the truck driver, stating,

“The Tribunal and High Court correctly relied on evidence fixing liability on the truck driver.”

The Insurance Company’s objection to the exchange rate was summarily dismissed. Referring to the recalculation by the High Court to reflect the 1995-96 rate of ₹52.35 per Pound Sterling, the Court found no cause for further interference and ruled,

“Adjustment justified and does not call for interference.”

However, the focal point of the litigation concerned the effect of the widow’s remarriage on the dependency claim. The insurer argued that since the widow remarried in 2002, the dependency period should be restricted to seven years. This argument was firmly rejected by the Court, which declared,

“Merely because the widow remarries, it cannot be said the minor children lose their right to compensation… dependency extends to the minor children independent of the widow’s remarriage.”

The Court elaborated that the loss of dependency continues unabated in respect of the minor children and consequently affirmed the application of a 13-year multiplier.

The insurance company further contested the award of interest from the date of filing of the claim petition, asserting that the long delay in adjudication (the petition remained pending from 1995 to 2017) was attributable to the claimants. The Court dismissed this contention, observing,

“Laws delays cannot, without proper substantiation, be cast upon the shoulders of one or other party to the lis.”

Clarifying the principle of awarding interest from the date of claim filing, the Court reaffirmed,

“Necessarily interest must run from the date of filing of the claim petition, to the date of payment; for which precedents are legion.”

Addressing the challenge to the interest rate of 9%, the Supreme Court referred to historical trends and prevailing inflationary circumstances and concluded,

“Considering the overall circumstances, especially the long delay caused, we are of the opinion that 9% interest rate granted by the Tribunal is perfectly in order.”

One of the final challenges raised by the insurer pertained to the inclusion of future prospects within the interest calculation, arguing that future prospects represent notional future income and should not attract interest. The Court rejected this view, making a scathing observation on the insurer’s failure to settle claims promptly:

“It is due to the repudiation or refusal to consider the claim that the claimants are driven to the Tribunal… If they are paid in time, it could be utilized by the claimants, and on failure, the loss of dependency would force the claimants to source their livelihood from elsewhere.”

In firm terms, the Court clarified, “Future prospects must attract interest to ensure fair recompense.”

In affirming the High Court’s judgment, the Supreme Court ordered the total compensation to be maintained at ₹76,63,508/-, with 9% simple interest running from the date of filing of the claim petition until the date of actual payment, subject to deduction of any interim payments already made.

The Court imposed a strict deadline for payment and issued a warning regarding delayed compliance, holding,

“The amounts awarded, if not paid, shall be paid within a period of 3 months and if defaulted shall carry 12% interest from the date of default.”

The Special Leave Petitions were dismissed in totality, with the Court emphasizing the necessity of fair and timely compensation to victims of motor vehicle accidents.

This judgment by the Supreme Court fortifies several vital legal principles under the Motor Vehicles Act, notably that remarriage of a widow does not extinguish or diminish the rights of minor children to full compensation. The Court also reinforced the entitlement of claimants to interest from the date of filing, including on the component of future prospects, ensuring victims are compensated fairly despite procedural delays.

In a forceful affirmation of claimants’ rights, the Supreme Court reiterated,

“Compensation in fatal accident cases serves to ameliorate the financial and emotional loss endured by dependents, and must not be thwarted by technical objections or insurer intransigence.”

This ruling not only safeguards the interests of vulnerable dependents but also serves as a stern reminder to insurers regarding their obligations under the law.

Date of Decision: 14th July 2025